Feds put Paul Martin Building on the market

Ottawa has begun advertising the Paul Martin Building for sale, and it’s entertaining offers for a new home for the hundreds of federal civil servants currently occupying the downtown structure.

That new home, in fact, could be the current address leased back to the feds after being refurbished by its new private owner.

“The proponent will have the flexibility of providing a range of options,” said Annie Trepanier, a spokeswoman for Public Works and Government Services Canada.

“For example, a proponent may structure an offer to purchase the building and execute a lease that would keep the employees in the building. Alternatively a proponent could structure an offer for the lease at a new location (either new building or existing,” she added in an emailed response to questions from The Star.

Commercial landlords, developers and any other interested parties have until June 20 to respond to a Request for Information call put out Wednesday by the department. An Industry Engagement Session, for pre-registered suppliers to consult with local commercial real estate experts, is scheduled for June 19.

The good news for Windsor is that the feds have specified the new location to house the displaced employees must be in the downtown, defined as an area between Riverside Drive to the north and Wyandotte Street to the south, and between McDougall Street in the east and Janette Avenue in the west.

The bad news?

“It’s going to be a challenge to find something in downtown Windsor — I don’t think there’s anything there today,” said Jim Williams, owner of ReMax Capital.

“It would have to be a new construction, for sure,” he said. The longtime commercial real estate broker said that could require a “substantial” investment of perhaps $15 million to $20 million, making a long-term lease deal with the feds — “probably 20 years” — a must.

But the invitation put out by Public Works Canada is only proposing a 10-year lease term with a single option of a five-year extension.

That raises the question over whether those hundreds of federal civil servants will remain in the city’s core. There are currently about 350 Canada Revenue Agency and about 50 Canada Post employees at 185 Ouellette Ave., but Trepanier only made mention of the CRA in her email.

“It does concern me — it’s the reason the city got involved in the first place,” said Mayor Eddie Francis.

The city thought it had a deal to house those federal employees in leased space at a new city hall, with the Paul Martin Building being transformed into a new University of Windsor law school for hundreds of students and staff.

Francis noted that Ottawa is advertising a Request for Information. “It’s not a binding RFP (Request for Proposals) — they’re feeling out the market,” he said.

The draft RFI specifies it is “only a general inquiry as to the availability of space to lease and potential solutions for 185 Ouellette Avenue.” This preliminary effort could result in a request for qualifications and then a request for proposals, or the landlord “may enter into direct negotiation” with a selected party.

Williams, whose firm specializes in commercial real estate, said he anticipates “some outside competition” for the contract to provide leased office space. He said such space can be found in Windsor, which is attractive for its property prices and its accessibility. “It’s way more affordable, and you can get around,” he said.

As for the building, which is surrounded by hoarding and in need of millions of dollars in facade rehabilitation, Public Works Canada is telling potential buyers it is “seeking options for the future use or disposal of 185 Ouellette Avenue.”

The mayor and others have said that, without the landlord covering the costs of repairs, there is a threat it will be demolished. Williams said it would be “very expensive” and difficult for a private buyer to make a go of it on their own.

In its RFI, the feds explain the limestone facade of the 1933-built structure “has experienced deterioration” and that the landlord has been making “necessary urgent repairs where and when required.” It also advises potential buyers that it is a “recognized federal heritage building” and that, once sold and transferred out of federal ownership, that heritage protection will continue under a city bylaw approved in December that will see it covered under the Ontario Heritage Act.

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